CIPD welcomes pensions' flexibility and choice

People management experts, the Chartered Institute of Personnel and Development (CIPD) broadly welcomes the Government's voluntarist approach to occupational pensions in its Green Paper, published on Tuesday 17th December.

Duncan Brown, CIPD Assistant Director-General comments, The Green Paper recognises the essential need to educate employees and provide them and their employers with choices, within a simplified, more flexible pensions framework. Employees should be seen as customers and not as take-it-or-leave-it recipients of a one-size-fits-all pensions scheme, when it may not suit their financial needs.

The CIPD believes that any proposals to force employers to provide occupational pension schemes, and employees to join them, would be inflexible and not suit the needs of many staff and organisations, in today's increasingly diverse and fast changing employment market-place. We can't turn the clock back to a world of mostly full-time male employees working for up to 40 years with the same employer, said Brown. As the disappointing take up of the new stakeholder pensions that employers now have to provide demonstrates, compulsion is increasingly out-of-step with a consumer-driven society.

The CIPD's recent publication, Pensions and HR's Role demonstrates that successful employers are crafting attractive total reward packages that meet the diverse needs of their workforce, and giving them choices to tailor their pensions and other benefits to suit their personal circumstances.

The CIPD also supports the Government's decision to resist calls to raise the state pension age to 70. These reflect a purely financially-oriented calculation, which takes no account of real employee's situations or wishes. Our research shows that one-third of under 25's already realise that they are not saving enough for their retirement and need to save more. They have got time to address it, and who knows how pension funds will fare on the stock market in the coming decades? Brown continues, with sufficient education and planning, the current view that we will all have to be working into our 70s could well be wide of the mark and alarmist.